The current fiscal crisis has many communities focused on maintaining current programs with shrinking budgets. But recovering from the economy also requires strategic planning to position your community for economic growth in the future.

Authors Steven Koven and Thomas Lyons offered five strategies for  economic development that will position your community for growth in a July 29 webconference.

Assess your community’s economic strengths and weaknesses

Koven suggests starting with a full SWOT (strengths, weaknesses, opportunities, and threats) assessment of your community’s current business climate.  He offered the following key questions to ask:

• How is your infrastructure? Do you have sufficient highways and airports for efficient transportation? Do you have any manufacturing facilities or office buildings currently in place that a business could quickly and easily move into?
• What are the key benefits of your community’s location? Do you have natural resources? Are there any unique amenities that may attract a business?
• How is your business environment?  Are you business friendly? Are you willing to be flexible, i.e., give tax breaks, etc?
• Are your citizens ready to meet the challenges that business needs them to make? Do they have the appropriate training or education for the business you want to attract?

Koven cautioned communities to seek opportunity only after a careful analysis. He recommended that managers look at opportunities with federal grants or local entrepreneurs as economic building blocks in addition to attracting existing businesses.

Build  Networks for Resource Sharing

Transformation requires deep change and synergy, Lyons said. In order to be competitive on a  global scale, local communities may need to partner to pool resources or reduce the cost of attracting business.

Communities may band together to build infrastructure, such as roads, or to provide more or highly specialized training to community members.  Two or more contiguous states may unite to protect and leverage a high-value natural resource that would be attractive to investors.

The key to collaboration, Lyons said, was to build a cooperative relationship that will increase each partner’s competitiveness in the global economy.

Support the Development of Entrepreneurs and Enterprisers

Entrepreneurship should be central to any economic development plan, Lyons said.  Small businesses currently make up 99% of all employers in the United States and account for about 75% of all net jobs.  Small businesses generate wealth that is reinvested in the community, draw on local resources,and create roots to the community. In essence, Lyons said, encouraging entrepreneurship is a low-cost strategy for economic development.  

Learn the Principles of Economic Development Bootstrapping

Economic bootstrapping is the practice of attracting investment that the economic developer can control and use to achieve community goals. This could involve simple arrangements such as attracting investors to local businesses. Entrepreneurs are natural bootstrappers, as they already have their “skin in the game,” which is attractive to investors.

Foster Green Business Activity

Finally, said Koven, communities should be prepared to take advantage of the green revolution. Current green technologies are already in place that will cut your costs and increase efficiency, but beyond that, he said, communities need to attract these green industries as a way of creating jobs.

Communities should ask themselves if residents are prepared to work in green jobs ranging from installation, to manufacturing, to research and development.